5 best online loans

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In a Nutshell

If you’re looking to make a large purchase or consolidate high-interest debt, you might consider getting a personal loan from an online lender. We’ve rounded up our picks for the best online loans for good credit, building credit, debt consolidation, home improvements and customer-friendly features.

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Choosing a personal loan among all the online lenders out there can be overwhelming.

That’s why we’ve put together this list of our picks for the best online lenders, including options for debt consolidation, home improvement, good credit and building credit.



Best for good credit: SoFi

Why SoFi stands out: SoFi offers competitive interest rates with no origination, late or prepayment fees. The company also has members-only perks and an “unemployment protection” feature.

  • High eligibility requirements: SoFi doesn’t share specific eligibility requirements but says you may qualify if you have a “responsible financial history” and “strong monthly cash flow.” SoFi also says it looks at your credit scores, debt-to-income ratio and career experience during the application process.
  • Competitive interest rates: SoFi offers competitive rates, especially if you’re among those with the best credit. It also offers a small rate discount if you opt for automatic payments.
  • Unemployment protection: SoFi’s unemployment protection is an attractive feature that you can apply for. The company may let you pause payments while you’re recovering from a layoff — assuming the job loss wasn’t your fault. If you pause payments, the loan will continue to accrue interest. SoFi also may offer assistance as you look for a new job.
  • Members-only perks: If you have a SoFi personal loan and become a SoFi member, you’ll have access to extra perks. These include a small discount on other SoFi loans, career services and community events.

Read our full review of SoFi personal loans to learn more.

Best for debt consolidation: Marcus by Goldman Sachs

Why Marcus stands out: Marcus, an arm of investment bank Goldman Sachs, offers competitive interest rates with no origination, late or prepayment fees. If you’re looking to pay off credit card debt, Marcus can pay up to 10 of your accounts directly — which may help prevent you from spending your loan funds elsewhere.

  • Good credit to qualify: To qualify for a Marcus personal loan, you’ll need decent credit. Most people who have Marcus personal loans have a FICO credit score of 660 or higher, according to the company’s 2018 annual report.
  • Competitive interest rates: Marcus offers competitive rates, but its lowest rates are available to borrowers with the best credit. You can expect higher rates for longer terms.
  • Ability to prequalify: You can apply to prequalify for a Marcus personal loan without hurting your credit scores. Marcus allows you to see estimated interest rates and loan amounts with a soft credit inquiry before submitting your loan application.
  • Change your payment due date: You can change your payment due date up to three times during the life of the loan.
  • Rewards for on-time payments: After making 12 or more consecutive on-time payments in full, you can defer one payment without paying extra interest or fees.

Read our full review of Marcus personal loans to learn more.

Best for home improvement: LightStream

Why LightStream stands out: LightStream, a division of SunTrust Bank, offers competitive interest rates when you enroll in autopay. Funds can be used for a variety of expenses, including home improvement. In some cases, LightStream may be willing to beat competitor interest rates under certain conditions. Check with the lender for details about its Rate Beat Program.

  • Flexible loan amounts and terms: LightStream offers personal loans from $5,000 to $100,000, which may be helpful for home improvement projects, small or large. Loan terms range from as little as two years to 12 years.
  • Potentially quick funding: It’s possible to receive the money in your bank account on the same business day you apply. This could be handy if you need extra funds quickly.
  • No fees or prepayment penalties: LightStream doesn’t charge any fees or prepayment penalties. You can also avoid appraisals or home equity requirements — which you may need for other loan options like a home equity loan or a home equity line of credit.

Read our full review of LightStream personal loans to learn more.

Best for customer-friendly features: Discover

Why Discover stands out: Discover offers a bunch of customer-friendly features like multiple repayment terms, same-day decisions in some cases, an option to pay off debts directly and access to your FICO score.

  • Good credit required: Discover doesn’t list its eligibility requirements on its website, but most people with Discover personal loans have credit scores of 660 or above, according to its 2018 public annual report filed with the SEC. You’ll also need a minimum household income of $25,000.
  • Competitive interest rates: Discover offers competitive interest rates, but it only offers the lowest rates to people with the best credit. Your credit history, application and loan term may also affect your interest rates.
  • Multiple term options: Discover offers a range of term options: 36, 48, 60, 72 and 84 months.
  • Direct payments to consolidate debt: Discover can make payments to other accounts to pay off debt on your behalf. If you use your loan for debt consolidation, you must use 70% of the money to pay off debts or you risk affecting your approval or interest rate.

Read our full review of Discover personal loans here. 

Best for people building credit: Avant

Why Avant stands out: Avant may be a good option if you’re struggling to qualify for personal loans with other lenders. You can complete the process online and may get a quick decision.

  • Qualify with less-than-perfect credit: Avant says that most of its personal loan customers have credit scores between 600 and 700, so you probably don’t need squeaky-clean credit reports to qualify.
  • Higher interest rates: A trade-off for less stringent credit requirements can be higher interest rates. Avant’s rates may not be competitive compared to other lenders.
  • Expect more fees: Avant charges an administrative fee — which is high compared to the other lenders on this list. The company also charges late payment and insufficient-funds fees.
  • Application to prequalify: If you’re worried that applying will affect your credit, Avant lets you apply for prequalification and check your potential loan offers with a soft inquiry that won’t hurt your credit scores. 

Read our full review of Avant personal loans to learn more.

What you should know about online loans

There are many reasons to apply for a personal loan with an online lender. You may want to consolidate high-interest debt on credit cards. Or you may want to finance costly home improvements. Either way, you’ll want to make sure to apply for an online loan with monthly payments you can afford.

Consolidate high-interest debt

If you’re wrestling with high-interest debt, you may feel desperate for relief. It may be possible to lock in a lower interest rate with a debt-consolidation loan. The goal is to pay off multiple accounts and shift to one manageable monthly payment.

You need to be careful, though. Even with a lower interest rate, you may end up paying more in interest over the life of your new loan if you go with a longer term. You also may have to pay fees, which can chip away at any savings.

Pay for home improvements

If you need money to pay for home improvements, you have several options, including home equity loans, HELOCs and online loans. One of the perks of an unsecured personal loan is you don’t have to use your home as collateral. That’s important if you feel uneasy putting your home on the line. The downside is unsecured loans may have higher interest rates.

Personal loans from online lenders may have shorter terms than home equity loans or HELOCs, so you’ll want to make sure you can comfortably afford the monthly payments. You should also watch for origination fees, prepayment penalties and late fees.

How we picked these loans

We reviewed more than a dozen online loans from a variety of lenders to choose our favorite personal loans from online lenders. We considered eligibility requirements, interest rates, fees, loan amounts and term options. We also looked at the application process, the ability to apply for prequalification with a soft credit inquiry, direct payments to creditors and other customer-friendly perks.